One-third of foreign workers leave job within a year

Foreign workers from outside the European Union are twice as likely as Maltese workers to present a termination notice within a year of being employed.

36% of third country nationals working in Malta have their job terminated within a year, while 15% have their jobs terminated in just three months.

Among Maltese workers, just 10% of all Maltese workers are subject to a termination notice within three months of them being first engaged. But the proportion then drops much more, with less than 20% being terminated in the first year.

Moreover, while in 2022 about 30% of all employed Maltese either changed their jobs or experienced a change in their employment status, over 50% of foreign workers from both the EU and outside it did so.

A Central Bank report measuring the extent of labour turnover in Malta authored by economist Aaron G Grech finds a rise over the past two decades, initially due to the increase in women joining the labour force, and subsequently due to higher inflows of foreign workers.

Turnover among the latter category is around twice that of Maltese workers.

Initially it was EU workers who were most transient, with nearly half of them presenting a termination notice within six months of being engaged. By 2022 this had halved, but over the same period, the length of stay of non-EU workers moved in the opposite direction and converged to that of EU workers.

Since both TCNs and EU nationals are much less likely than Maltese citizens to stay with the same employer for more than a year, “the greater reliance on foreign workers is leading to higher labour turnover”.

The report links increased labour turnover with labour shortages: despite the increase in labour supply, Maltese firms have consistently indicated that labour shortages stifle their operations.

The report concludes that it is “increasingly evident that a major cause of these business complaints is, in fact, the significant growth and extent of labour turnover.”

The increase in turnover is linked to the increase in the number of foreign workers from 5,231 in 2005 to 96,970 in 2022 among which labour turnover is much more pronounced than amongst Maltese ones. For example, in 2022, the sum of engagements and terminations of TCNs was 1.5 times the amount of TCNs employed the previous year, more than double the rate seen for Maltese nationals.

Childcare centres reduced turnover among women

The report notes that before the introduction of free childcare in 2014, many women tended to drop out from the labour force to take care of their children, resulting in greater labour turnover among women. Women also tended to take up part-time jobs.

But policies aimed at encouraging women to work drove many relatively unskilled women into joining the labour market, many for the first time or after long career breaks. This resulted in a peak of labour turnover among women in 2015.

Subsequently labour turnover rates for women declined levelling with those of men. On the other hand, turnover rates among men were boosted by the larger share of foreign men working in Malta.

The re-juvenation of the Maltese working class, due to the influx of both women and migrants, has also contributed to higher job turnover rates. For while an ageing workforce normally leads to a more stable workforce as was the case in Malta between 2005 and 2010, the surge in both foreign workers and female workers has contributed to a more mobile workforce.

Labour turnover rates were highest in the catering and hospitality industry. In this sector turnover rates were three times higher those in the public sector.